2013 brought much improvement to the Orono housing market. Sellers and Buyers remained optomistic that the overall economy and Orono housing market would continue on with the improvements made at the end of 2012. Strong buyer demand in Orono housing matched with the small 2.3% decrease in listings pushed Orono’s 2013 median sales price up 32.5% while the average days on market fell to 168, lowering the number of months of housing inventory by 31% over the previous year. Builders in 2013 had been trying to keep up with buyer demand, however, due to the amount of demand and the lack of new construction inventory the % of original asking price for new construction remained above 100%, ending with the 12 month median at 103.8%. Despite the overall low inventory, Orono's total sales for the year increased by 8.7% to 175.
As we look forward over the next 12 months to the direction of the local housing market, we will be following a couple key factors. First, the Fed's continued pull back of quantitative easing which, when paired with economic data, will impact current interest rates. Secondly, keeping an eye on the housing affordability index will be important. The housing affordability index, which is based on the median housing price, median family income and the average interest rate, will provide detail on where the market's move from the historic highs. These factors will help direct the improvements that Orono real estate experienced last year.